Farhan Abdul Rahim, a tech geek and adrenaline junkie, bought an electric car in 2020.
Farhan drove his Tesla around the Malay peninsula for three days in June to confirm that electric vehicles (EVs) can operate in rural areas of the Southeast Asian nation.
As a Petronas manager and someone who helped the company consider establishing EV charging stations during coronavirus lockdowns in 2021, Farhan was well aware of the difficulties such a journey would entail.
It’s the first time I’d done this (trip) with an EV
Farhan Abdul Rahim, a tech geek and adrenaline junkie
Farhan said he became interested in EVs in 2017 after attending a work conference that featured a stand promoting the vehicles and a Tesla on display.
(The trip) was about busting the myth and helping the EV community, who say you cannot go to the eastern part of Malaysia with an EV
Farhan Abdul Rahim, a tech geek and adrenaline junkie.
EV is increasing worldwide
Electric vehicle production and sales are increasing globally, with the industry seen as critical in the fight against climate change by reducing emissions from gasoline and diesel fuel, reducing oil imports and fuel subsidies, and encouraging investment in renewable energy sources.
According to Rahul Gupta, an associate partner at McKinsey & Company in Singapore, more environmentally conscious drivers are going green, with EV and hybrid vehicles reporting for 18% of global sales of four-wheeled vehicles last year.
However, that uptake was primarily in the United States, Europe, and China, with the latter two markets accounting for about 20% and 25% of sales, respectively, he said.
He says that in South Asia, EVs will account for less than 2% of sales in 2022.
According to analysts, the region has been held back by a need for charging infrastructure outside urban areas, tax subsidies and incentives for carmakers and buyers, and slow progress on improving affordable EVs among Southeast Asia’s leading manufacturers.
On the other hand, governments appear eager to pick up the pace, offering increasing incentives to auto and battery manufacturers, tax breaks for buyers, and setting ambitious goals as they strive to position themselves as regional EV manufacturing hubs.
Farhan found that a trip to Malaysia to demonstrate the capabilities of EVs had unexpected benefits.
I could actually appreciate the landscape and scenery on the journey
Farhan Abdul Rahim, a tech geek and adrenaline junkie, stated on the EV unexpected benefits
According to Benedict Eijbergen, World Bank transit practice manager for East Asia and the Pacific, two and three-wheelers ranging from motorbikes to tuk-tuks account for roughly 80% of vehicles on the road Southeast Asia.
He said that the region’s EV transition would be very different from that of China, Europe, and the United States, where EV growth is driven by car electrification.
Two-wheeled EVs have been more popular in the region than electric cars, accounting for about 8% of total vehicle sales in market leader Vietnam in 2020, according to Eijbergen.
However, McKinsey & Company’s Gupta stated that the higher cost of purchasing an EV versus an ICE vehicle deterred many drivers from switching.
To resolve this, governments must provide subsidies at the time of purchase to assist buyers and incentives or tax breaks for automakers to reduce production costs, according to Gupta.
Thailand authorized a package of incentives, including tax breaks and subsidies, to promote EVs last year. Earlier this month, Indonesia said it was considering lowering the value-added tax on electric car sales to 1% from 11%.
More charging infrastructure and greater availability and variety of EVs would help increase the region’s appetite for these vehicles, as would governments designed to set timelines for the phase-out of petrol and diesel vehicles, according to Gupta.
Since many Southeast Asian countries have optimistic net-zero plans, including support for EV purchases, rebates, and charging infrastructure, implementation is widely uneven, according to Gregory Poling, director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C. (CSIS).
The insufficiency of charging stations outside of cities is a problem in many parts of the world, and development in countries such as Indonesia – an archipelago of thousands of islands – is likely to be difficult, he added.
EVs are still a luxury item for the most part in Southeast Asia, as they are globally
Gregory Poling, Director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C. (CSIS) stated on EV as luxury item
The climate is unimportant
Greater EV adoption in Southeast Asian countries would help them meet international climate goals and attract companies who are interested in investing in nations participating in the global decarbonization push, according to Poling.
Poling predicts Southeast Asian countries will attempt to establish themselves as regional EV manufacturing hubs in the coming years. Ample nickel reserves in Indonesia and the Philippines could help manufacture the required batteries.
However, climate change mitigation is unlikely to drive most of the region’s EV growth.
Most of these countries, understandably, still believe rightly that they didn’t make this problem,
The West made this problem, so why should they have to crimp economic growth – if that’s what it takes – in the name of switching over to green electricity generation and EVs?
Gregory Poling, Director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington, D.C. (CSIS) stated onEV growth
According to Abhilash Gupta, an automotive analyst at research firm Counterpoint, EV battery production is unlikely to be carbon neutral. Increased mining and manufacturing could pose environmental and human risks.
(Southeast Asian) nations are rushing to attract more multinational corporations and, therefore, are not adequately focusing on sustainable practices in the mining and production cycle
Abhilash Gupta, an automotive analyst at research firm Counterpoint stated on Southeast Asia’s sustainable practices
Indonesia has signed at least a dozen deals worth more than $15 billion in the last three years for battery and EV manufacturing. President Joko Widodo has attempted to persuade Tesla CEO Elon Musk to invest.
The Chicken and egg situation
Farhan from Malaysia says that working at Kuala Lumpur’s iconic Petronas Twin Towers gives him entry to underground parking and about 50 charging points – the region’s largest single concentration of EV charging stations.
However, transitioning to EVs is more difficult for the general public, he said, because many condominiums hesitate to set up charging points or even enable homeowners to do so at their own expense.
He added that numerous auto dealers are also under-trained to promote EVs or provide essential advice to prospective EV owners.
Farhan, however, believes that increased government tax breaks are beneficial. Malaysia has exempted EVs from import duties and excise taxes, and the new government is expected to announce additional financial incentives in its 2023 budget this week.
According to Farhan, a Malaysian Electric Vehicle Owners Club member, there are approximately 2,400 registered EVs in the country, up from about 240 in early 2021.
He encouraged the government to set assertive EV targets and create a unified body to lead the country’s EV charge, but he admitted that the overall picture was complex.
It’s a sensitive thing because Malaysia is a net producer of oil, It’s a chicken and egg situation,
(But) I’m not going to buy petrol. It’s going to be electric vehicles from now on
Farhan, a Malaysian Electric Vehicle Owners Club Member stated on EV community
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